from the seeeeee? dept

It's become commonplace in some parts of the legacy content industries to hate on basically any successful internet service that brings creative content to the public in a way that people actually like. We see attacks on Spotify, Netflix, Pandora and more for "not paying enough," and demands from those companies that they need to pay more. As we've noted, this often takes the form of trying to kill the golden goose. Almost always implicit in these discussions is the idea that the service itself is worthless and that all of the value comes from the content. That these services deserve to make any money at all is seen as some sort of insult to the copyright holders. The underlying belief here is that the service part is easy.

But, of course, that's wrong. Lots of services try and fail to capture the public's imagination. The content is important (and all of these services pay huge amounts of money -- often way more than half of their revenue to the copyright holders) but building a service people actually want to use is not an easy task. When those who think otherwise jump in and think they can simply "build their own" such service, you hope they would slowly start to understand this point.

You may recall that Jay-Z recently bought and relaunched a music streaming service, naming it Tidal. The whole rollout had severe issues, some of which Mike outlined in the post linked above (the lack of any free tier), and some issues I had myself that dovetail with Tidal's entire marketing platform. You see, Tidal's message was all about how artist-friendly it would be, working itself into a froth over being the anti-Pandora/Spotify/Whatever service, which were all demonized as not paying artists nearly enough money for their music. Which, fine, whatever, it's a message of a sort, I suppose. But to roll that message out with marketing ads featuring insanely wealthy musicians in designer clothes all getting together to talk about ushering in a new service designed to generate more money for themselves (and perhaps newer artists too)? Look, there's nothing wrong with being rich, but that's just bad PR.

Tidal is now the 50th most popular music app in the iTunes store, and doesn't even crack the top 700 overall. Any hot new app will see a big drop in downloads after the hype from its launch dies down, but it doesn't look like Tidal was all that hot to begin with. It briefly peaked at #19 overall before falling out of the top 200 less than two weeks later.

Meanwhile, its competitors are surging: Pandora is at #7, Spotify is at #34, and Beats Music just broke the top 50. Even circa-2013 Spotify challenger Rdio is seeing more downloads than Tidal this week.

Not a good showing, especially given all of the star-power behind it. But let's not treat this by dancing on any freshly dug graves. That would be premature anyway, since we are only talking about a couple of weeks worth of market time here. Regardless of that fact, what this should do is teach some artists an important lesson about the difficulty of providing a music streaming platform, the market forces that decided the winners and losers, and the value that a good streaming service brings both to customers and to artists alike.

The whole campaign against Pandora and Spotify has been insane since the very beginning. Streaming services that provide a useful way for customers and potential customers to find, listen to, and to become fans of artists and their work were demonized as greedy technocratic regimes designed solely to make sure singers didn't have enough bus-fare to get home at night. That was silly, of course, as one look at the amount of income those streaming services generate versus what artists wanted in terms of royalties, but the whole thing was really begging for a "If you think it's so easy, come up with your own service" rebuttal. Jay-Z tried to take this on. It's starting to look like he failed.

Failure is okay, but only if you learn from it. The very thing that Tidal failed to offer is what makes the other services so popular.

Some of Tidal’s problems were apparent to anyone who is not a wealthy member of the illuminati or close personal friend of Jay Z: its main value proposition was that, for only 10 dollars a month more than you’re paying for Spotify—that’s just two Starbucks lattes!—you can feed and clothe the famous multimillionaires you see on your screen. But it also had some less obvious flaws, like a very shittily-designed app with broken search functionality and a marketing message—attacking those other, non-artist-benefitting streaming services—that seems to have helped Spotify more than it helped Tidal.

Combined with no free tier, the single selling point for Tidal appeared to be appealing to the masses to use a service that pays artists more money than the others. It didn't work. Not because people do not want artists to succeed, but because the other services work better than Tidal and the artists pimping Tidal did nothing to connect with customers. It was a plea, entirely one-sided, with nothing additional offered to the customer. That's the lesson: streaming services aren't as easy to do as these artists thought. Now let's see if they do anything with that lesson.

from the winning dept

One thing game developers have always had, and will always have, to deal with is the dreaded copycat clone. It's something of a success indicator when you create something entertaining enough to breed like products. As they say, imitation is the sincerest form of flattery. Or, instead of being flattered, you can go the Zynga route and sue folks using IP laws rather than compete with them directly. Or, if one were so inclined, one could take a page out of the Namco playbook and threaten a kid for making a Pacman clone. Defenders of these actions will claim that they're necessary. After all, a great amount of work and development went into those games and it seems unfair for a copycat to come along, use similar designs, and reap the benefits. How could the original creator compete with that?

Here to show us how the original creator could compete with that is Rami Ismail, developer of Ridiculous Fishing, who was just a tad late to the iOS market compared with copycat Ninja Fishing. Instead of going legal, or even crying foul, however, Ismail just concentrated on making his game freaking awesome.

"When we released the game, we promised people that for $2.99 (£1.79) they would get Ridiculous Fishing without any further in-app purchases or anything," he told Digital Spy at PC and indie games expo Rezzed.

"We're going to keep our word, but we want to emphasize that point that we were really serious about that. The plan we have now, if we pull it off the way we want to, we're going to double the content and add a completely new narrative arc, and explore that world a bit further."

The result? Well, Ridiculous Fishing got real big, real fast. Ninja Fishing did okay as well, but Ismail's game has the kind of cachet that only comes with a tightly developed game and a loyal fanbase. Built largely off of his promise to refrain from in-app purchases and his passion for his customers, the whole thing exploded on iOS once it was released.

"Then what happened, that bubble just exploded. Elijah Wood played Ridiculous Fishing and tweeted about it. That's mind-blowing. That's not something that happens. We didn't expect it to be this big - we hoped it would be this size. We really hoped this would be the definitive statement about creativity will always win, because obviously the whole cloning background is still there for us, right?

"We still want to make this statement that Ninja Fishing did well, but Ridiculous Fishing wins because it was the better game. Better games win. That's what we hoped people would get out of it, and I think they did."

A ton of downloads and one Apple design award later, Ismail serves as the perfect example of what the combination of fan loyalty and well-designed products mean in the war against game cloners. Instead of focusing on being angry and going the legal route, Ismail won because his game is better. Something to which the rest of the developer community should probably be paying attention.

from the don't-bogart-that-info dept

Recently we ran a post discussing Harvard Business Review's decision to go DRM-free and platform independent. The author behind the original post, Joshua Gans, suggested that HBR's ebook policy could open it up to more innovative offerings that rewarded both the publisher and the authors for selling their books through HBR:

I have my own eBook coming out with HBR Press in a very short time. I’d love it to be the case that they decided to offer the book on their site with an explicit ‘sharing’ option. For instance, the normal ‘don’t share’ this book might cost the same as Amazon while the ‘sharing’ option may be somewhat higher but would say allow you to assign ‘ownership’ of the book to another person as well.

Now the first, snarky remark somebody makes when you release a book about sharing information is that it is kind of hard to share eBooks...Nonetheless, I believe it was very important to take that challenge head on and, as it turned out, the folks at Harvard Business Review Press were more than agreeable to some experimentation.

The idea was that when a reader recommends a book to someone else they are performing an extremely valuable service to authors/publishers. The problem is that, while with physical books, lending between friends can perform that service, trying the same thing for eBooks makes a mockery of the technology.

Obviously, once you've taken DRM and platform dependence out of the picture, sharing can become too easy, so to speak. And while Barnes & Noble and Amazon have certain books "lending enabled," the "lending" is done in the most literal (pretty much "physical") sense, with the copy vanishing from one device and appearing on the lendee's. Gans was looking for something that split the difference between "sharing" and "recommending" which would make it easier for those on the receiving end to pick up a "no strings attached" copy of their own. Selling through HBR made the sharing part easier, but setting a price was a bit trickier, leading to this compromise:

So here is the experiment they are running. If you buy my book (the price is $4.99) from HBR directly (which is DRM free and multi-format so it can be read on any device) or if you buy it from Amazon, Apple, B&N etc, you can flip to the last page of the book. You will see there a coupon. If you send that coupon to a friend, they can download the book from HBR (and HBR only) for just $0.99 (in its multi-format DRM free form).

The lowered price should make the "second-hand" purchase a no-brainer, especially if the coupon is sent their way by someone whose opinion they respect. The advantage for Gans (and HBR) lies in the potential addition to readership and the data collected during the experiment. But even if it turns into a publisher's worst nightmare, there's still plenty to like about it.

Will this work? It is hard to know. HBR will keep stats on this and hopefully I can share them in the future. Are there risks? Absolutely. All my readers could form a collective and potentially buy one copy for $4.99 and then a million for $0.99. A disaster! Actually, no that sounds pretty darn good to me. (I won’t speak for my publisher).

As Gans notes, he'll be tracking the results with interest, and hopefully HBR will let him share the data. As the ebook field continues to grow, any information on pricing experiments will be very useful for up-and-coming writers.

from the nicely-done dept

For years, I've been fascinated by Jeff Bezos' ability to make big risky decisions for Amazon and stand up to intense investor pressure to go in a different direction. While everything may seem rosy at Amazon these days, for years, it was amazing to see just how much investor animosity there was towards some of Bezos' moves. For years -- quite by design -- the company focused on growth and expansion over profitability, earning complaints from investors. Then Amazon focused on expanding its free shipping program, which drew the ire of investors who thought it was costing the company too much. But Amazon stuck with these efforts and became the dominant player in the field. More recently, it's done things that left some investors scratching their heads, such as the whole Amazon Web Services effort, and even the early Kindle effort -- and yet both have proven to be quite successful.

In a way, that is like the nicest compliment Iíve ever gotten. First of all, I think we have gotten pretty lucky recently. You should anticipate a certain amount of failure. Our two big initiatives, AWS and Kindle ó two big, clean-sheet initiatives ó have worked out very well. Ninety-plus percent of the innovation at Amazon is incremental and critical and much less risky. We know how to open new product categories. We know how to open new geographies. That doesnít mean that these things are guaranteed to work, but we have a lot of expertise and a lot of knowledge. We know how to open new fulfillment centers, whether to open one, where to locate it, how big to make it. All of these things based on our operating history are things that we can analyze quantitatively rather than to have to make intuitive judgments.

When you look at something like, go back in time when we started working on Kindle almost seven years agoÖ. There you just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you havenít invented for too long.

If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company. AWS also started about six or seven years ago. We are planting more seeds right now, and it is too early to talk about them, but we are going to continue to plant seeds. And I can guarantee you that everything we do will not work. And, I am never concerned about thatÖ. We are stubborn on vision. We are flexible on detailsÖ. We donít give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didnít give up.

But. if you get to a point where you look at it and you say look, we are continuing invest a lot of money in this, and itís not working and we have a bunch of other good businesses, and this is a hypothetical scenario, and we are going to give up on this. On the day you decide to give up on it, what happens? Your operating margins go up because you stopped investing in something that wasnít working. Is that really such a bad day?

So, my mind never lets me get in a place where I think we canít afford to take these bets, because the bad case never seems that bad to me. And, I think to have that point of view, requires a corporate culture that does a few things. I donít think every company can do that, can take that point of view. A big piece of the story we tell ourselves about who we are, is that we are willing to invent. We are willing to think long-term. We start with the customer and work backwards. And, very importantly, we are willing to be misunderstood for long periods of time.

I believe if you donít have that set of things in your corporate culture, then you canít do large-scale invention. You can do incremental invention, which is critically important for any company. But it is very difficult ó if you are not willing to be misunderstood. People will misunderstand you.

Any time you do something big, thatís disruptive ó Kindle, AWS ó there will be critics. And there will be at least two kinds of critics. There will be well-meaning critics who genuinely misunderstand what you are doing or genuinely have a different opinion. And there will be the self-interested critics that have a vested interest in not liking what you are doing and they will have reason to misunderstand. And you have to be willing to ignore both types of critics. You listen to them, because you want to see, always testing, is it possible they are right?

But if you hold back and you say, ĎNo, we believe in this vision,í then you just stay heads down, stay focused and you build out your vision.

That idea of willing to be misunderstood for a long time really has been the key to Amazon's success, and Bezos' ability to stand up to investors who regularly called for changes in strategy and to focus on the long-term has really paid off. In this age when "pivot" has become a buzzword in the startup community (there's even a whole conference on the subject), where companies completely shift strategies on whims, perhaps there's something to be said for seeing the long term game plan better than others, and sticking to it. Obviously, this doesn't mean being totally pigheaded if an idea isn't working, but Bezos' point is to be flexible on the details, but stay true to the ultimate vision you believe in. That's really, really tough for a lot of entrepreneurs to do, but it's a really important lesson to learn.